What is the Energy Efficiency Directive?

by Robin Fontaine

The following article is part of the Fit for 55 series, analysing all policies, directives, and strategies that are part of the EU’s plan to reduce net carbon emissions by 55% until 2030 and reach net-zero emissions by 2050. It specifically looks at the Energy Efficiency Directive (EDD). 

What do you mean by energy efficiency?

To properly understand what this directive is about, why it is important, and what could be improved, we first have to understand what is meant by energy efficiency. Energy efficiency is calculated by dividing the energy obtained (output) by the initial energy (input), keeping in mind that energy takes many forms such as light, heat or motion. Concretely, when turning on an incandescent lamp, most of the energy does not serve to give light but is lost in heat. If most energy is lost instead of serving the actual purpose of the apparel it has a low efficiency. 

Energy efficiency is quite wide as it covers several stages of the supply chain, including generation, transport, distribution, and final consumption [2]. A lot of energy is lost in between what is being produced and what the end customer actually uses. 

Let’s look at a concrete example to understand better. When you prepare a cup of coffee, your coffee machine will use between 150 to 300 watts [3]. However, the power plant will need to produce a lot more than 300 watts to ensure that you, as the end customer, get enough power. In this example, the power plant’s needs are referred to as the primary energy consumption and your needs are referred to as the final energy consumption [4]. 

Energy efficiency has been regarded as one of the most efficient ways to address the negative effects of climate change [1].Therefore, the EU has set up energy efficiency as one of its primary commitments next to the renewables and energy taxation directives [5]. Reducing our energy consumption by improving storage or energy loss in transport is a key element in all climate scenarios [6] 

So what is the directive about? 

The EED is not a new directive. It was first adopted by the EU in 2012 setting a target of a 20% increase in energy efficiency by 2020 compared to 1990 levels. This was amended in 2018 to reach 32.5% by 2030 [7]. Yet, even this higher target is still not enough to reach the EU’s ambition of reducing carbon emissions by 55% until 2030. Projections show that even if fully implemented, the current policies would only lead to a decrease in carbon emissions of around 45% compared to 1990 levels when excluding land-use emissions and absorptions, and around 47%, when including land use [5].

Consequently, in 2021 the European Commission proposed a new amendment to reach its goals. One major change of this proposal is that the EU energy efficiency directive will become binding. All Member States will have to collectively achieve a 9% decrease in energy consumption by 2030 compared to the referenced 2020 scenarios. To achieve this, all countries will have to set up indicative national contributions based on their energy intensity, GDP per capita, energy-saving potential, and fixed energy consumption reduction [7]. 

The new proposal nearly doubles Member States’ previously established energy-saving obligations [2]. In terms of what that concretely represents, the 2030 primary energy consumption should not exceed 1023 (1483 previously) megatonnes of oil equivalent (Mtoe) and the final energy consumption should not be higher than 787 (1086 previously) Mtoe [1]. 

To achieve these goals, the directive outlines several specific regulations. One of the most prominent is that all Member States must ensure renovation of at least 3% of floor area covered by public buildings each year to at least nearly zero-energy buildings or NZEB [6]. 

What should be improved? 

It is important to note that while Europe did achieve its 20% energy consumption reduction goal by 2020, the Covid-19 crisis did contribute a lot to this achievement [5]. Prior to the sanitary crisis, the EU was off course in decreasing both primary and final energy consumption. Currently, industries are starting to operate again at full capacity and  the EU is going through an energy crisis.  Due to a sharp rise in global and European demand energy prices are rising in almost every country [8]. Improving efficiency means decreasing the amount of fuel needed to produce energy, thus reducing demand and consequently lowering the prices of energy [9]

More practical efforts are needed in renovating buildings both in terms of rates and depths. Basing the renovation on a percentage of public buildings to be renovated does not clarify which buildings will be targeted; instead the 3% renovation should be focussed on energy-intensive buildings such as hospitals and there should be no alternative approach to renovation [6]. Further, the rate of energy-efficient appliances should significantly increase and all Member States must emphasise efforts to phase out fossil fuel-based heating systems [6].

References:

[1] Román-Colladoa, R. Economidou, M. The role of energy efficiency in assessing the progress towards the EU energy efficiency targets of 2020: Evidence from the European productive sectors, Energy Policy, Volume 156, September 2021. Available at: https://doi.org/10.1016/j.enpol.2021.112441 
[2] Proposal for a Directive on energy efficiency (recast), European Souces Online. Available at: https://www.europeansources.info/record/proposal-for-a-directive-on-energy-efficiency-recast/ [last accessed 10.10.2021]
[3] Electricity usage of a Coffee Maker, Energy Use Calculator. Available at: https://energyusecalculator.com/electricity_coffeemaker.htm 
[4] Primary and final energy consumption slowly decreasing, Eurostats. Available at: https://ec.europa.eu/eurostat/web/products-eurostat-news/-/ddn-20210128-1/ [Last accessed 12.10.2021]
[5] Energy efficiency directive, European Commission. Available at: https://ec.europa.eu/energy/topics/energy-efficiency/targets-directive-and-rules/energy-efficiency-directive_en [last accessed 11.10.2021]
[6] Energy Efficiency Directive review 2021: let’s make it count. CAN Europe. Available at: https://caneurope.org/energy-efficiency-directive-review/ [last accessed: 11.10.2021]
[7] The Energy Efficiency Directive,  European Council for an Energy-Efficient Economy. Available at: https://www.eceee.org/policy-areas/EE-directive/ [last accessed 10.10.2021]
[8] 5 things you should know about Europe’s energy crisis, World Economic Forum. Available at: https://www.weforum.org/agenda/2021/10/5-facts-europe-energy-crisis/ [last accessed 12.10.2021]
[9] European Commission. Questions and Answers: Commission Communication on Energy Prices. Available at: https://ec.europa.eu/commission/presscorner/detail/en/QANDA_21_5202 [last accessed 14.10.2021]